Models
Sustainable materials and methods frequently call for new commercial, organizational, and operational models. Sustainable models require oversight across procure-to-pay (PRP) processes and a high focus on spending compliance. A connected construction ecosystem can help by ensuring that developers and operators have a continuous flow of data and information about all aspects of a project, including carbon reduction and cost. Returns can come instantly or over decades. For example, incorporating high energy efficiency in buildings helps save significantly on energy costs over a building’s lifetime.
Industry forces both impede and fuel progress
Even with a stronger focus through these lenses, getting to net-zero will likely be a formidable challenge. Environmentally conscious engineering and construction companies may face significant challenges as they endeavor toward serving customers and meeting climate goals.
Among the headwinds are rising material costs and interest rates, as well as labor shortages and supply chain constraints.8 Four in five engineering and construction organizations cite supply chain disruptions as one of the top three challenges in their companies.9 In addition, homebuilders will likely experience sluggish demand as real consumer spending is forecast to fall in 2023, amid an uncertain economic environment.10 Then there is the cost of money: In May 2023, the average rate on a 30-year fixed-rate mortgage was 6.39 percent, which is more than double the pandemic rates.11
On the other hand, infrastructure projects are likely to remain relatively insulated from the economic slowdown, driven by strong infrastructure buildouts and the substantial project backlogs developers and contractors have in their pipeline. In addition, starting October 2022, the next round of $1 trillion funding in the Infrastructure Investment and Jobs Act (IIJA) entered the market for several projects.12
Four ways to reduce emissions
Other possible tailwinds for sustainable engineering and construction include innovative materials, digital technology, regulation, and policy incentives.
